Updated from 2:54 p.m. EDT

The uptick rule could return within a month, if Rep. Barney Frank (D., Mass.) is to be believed.

The House Financial Services Committee Chairman told reporters Tuesday that he would like to see the so-called uptick rule quickly reinstated. Frank also expressed support for a change to mark-to-market accounting rules and the disbursement of Troubled Asset Relief Program, or TARP, funds to small banks.

Frank said he's spoken to Securities and Exchange Commission Chairman Mary Schapiro about bringing back the rule. "I am hopeful the uptick rule will be restored within a month," Frank told reporters in Washington, according to CNBC.

The SEC may consider whether to propose reinstating the rule as early as next month, a person at the agency told The Wall Street Journal. According to the report, regulators are leaning in that direction.

The uptick rule, instituted by the SEC following the Great Depression, said that the short selling of stocks could be done only after the share price ticked higher above the prior sale. The rule was designed as a guardrail to prevent short sellers from driving the price of a stock lower at a faster clip.

In a short sale, an investor borrows a stock from a broker, sells it to other investors, and tries to buy it back at a lower price before returning it to the original lender. The difference in the transactions is kept as a profit.

The SEC made the controversial decision to eliminate the uptick rule in June 2007 after its analysis showed it did little to prevent the manipulation of share prices. Of course, many market participants point to the SEC's decision as the catalyst that helped short sellers thrive in 2008.

The argument is that the lack of a rule that required share prices to tick higher before more short sellers could pile in created an environment where shorts could accelerate the failures of a number of companies, especially financial names like Bear Stearns, Lehman Brothers and Washington Mutual.

Other financials, such as Citigroup ( C), Bank of America ( BAC), AIG ( AIG), Goldman Sachs ( GS) and Morgan Stanley ( MS), have also seen their share prices driven down dramatically, with many attributing the moves lower to short sellers benefiting from the suspension of the uptick rule.

The financial sector responded positively to word of a reinstatement of the uptick rule as well as word that Citigroup has been profitable through the first two months of the year.

Shares of Citigroup surged 38.1% Tuesday, Bank of America jumped 27.7%, AIG rose 20% and Goldman Sachs gained 15.3%.

Many market participants argue that a reinstitution of the uptick rule would be a major positive catalyst for the stock market. The market welcomed Frank's comments with a 300-point rally on the Dow Jones Industrial Average. However, some have argued that the uptick rule is not a panacea.

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